Alveolar type II cells are specialized epithelial cells that line the alveolus and make and secrete pulmonary surface active material. These cells are thought to be the stem cells for maintaining the epithelium and have recently been shown to be capable of transporting fluid and electrolytes in vitro. Type II cells comprise only 15% of the total lung cells, and hence, their biochemical properties and physiologic functions are difficult to study with intact lung. We have developed techniques for isolating alveolar type II cells from adult rat lungs, and in this proposal we will use purified alveolar type II cells to study their functions in vitro and to establish the biochemical basis for these functions. We will study lipid synthesis, secretion, proliferation, and transepithelial transport. We plan to determine the enzymatic basis and control for the synthesis of surfactant phospholipids. Because type II cells are unique lipogenic cells that make phospholipids for secretion as well as for cellular membranes, we plan to use these cells to discover how phospholipids destined for secretion are transported intracellularly and segregated from phospholipids destined for cellular membranes. We will determine the role of protein kinase C and A in secretion. Studies of type II cells in vitro also provide an opportunity to study the cellular basis for injury and repair in the lung. Type II cells proliferate in vivo after damage to the alveolar epithelium, but the factors that stimulate proliferation of type II cells are not known. We will focus on growth factors made by macrophages, because these growth factors may be an important physiologic stimulus for re-epithelialization of the alveolar wall after lung injury, and restoration of the gas exchange function of the lung. In addition, we want to characterize and isolate the factor(s) made by macrophages because to our knowledge this is the first demonstration of a macrophage factor that stimulates DNA synthesis in epithelial cells. We will study transepithelial electrolyte transport and proton secretion by type II cells in order to improve our understanding of the regulation of the alveolar subphase (alveolar fluid) in vivo. The proposed studies address basic mechanisms involved in neonatal and adult respiratory distress syndromes, interstitial lung disease, and pulmonary edema.